The S&P 500 and Dow pulled back from record levels on Wednesday while the Nasdaq gained, as investors eyed a slew of stronger-than-expected earnings results from closely watched technology companies. The Nasdaq 100 set a record high.
West Texas intermediate crude oil prices retreated after a recent run-up but remained near their highest level since 2014. Treasury yields sank across the curve, and the benchmark 10-year yield fell below 1.6%.
Google's parent-company Alphabet (GOOG, GOOGL) reached a record high, rising in its best day since February after posting third-quarter revenues and earnings that topped consensus estimates. These results were fueled by a further rise in online advertising spending, especially among retailers on Google Search. YouTube and Google Cloud revenue growth, however, slowed compared to the prior quarter. And Microsoft (MSFT) posted quarterly results that exceeded estimates on nearly every major metric, aided by another surge in the company's closely watched cloud computing business segment. The Redmond, Washington-based company also saw its stock jump to a record high on Wednesday following its latest report.
Outside of the mega-cap technology companies, a number of other corporations also posted resilient earnings results. Twitter (TWTR) shares gained in late trading after posting third-quarter sales that were about in-line with expectations, while Wall Street had braced for the company to see similar negative impacts from Apple's iOS privacy update as peer social media company Snap (SNAP) had reported for the same quarter.
And chipmaker Advanced Micro Devices (AMD) also delivered quarterly earnings that exceeded estimates and boosted its full-year forecast. The company noted that supply chain constraints were partially inhibiting its ability to meet demand to provide PC and video-game console chips, though CEO Lisa Su added during AMD's earnings call that she believed the current supply-side challenges would improve next year.
The latest batch of earnings results helped affirm to Wall Street that many companies have been able to work through rising price pressures to continue delivering estimates-topping sales and profits. Though many pundits have suggested inflationary pressures and supply chain disruptions could last for longer than previously anticipated, few have suggested the impacts will be insurmountable to most major companies.
"What we've got from these supply chain issues is a near-term earnings problem. I think it's something we do have to monitor in the first half of the year," Lori Calvasina, RBC Capital Markets chief equity strategist, told Yahoo Finance on Tuesday. "Earnings growth is only tracking at 4% or 6% in the first two quarters of next year. So companies do have to keep managing through for the market to continue to move up."
"But the reality is that the underlying economic backdrop simply is not stagnant," she added. "I really just don't buy into that stagflation argument at all."
And on the demand side, American consumers have shown few signs of slowing their spending in the face of rising inflation. The Conference Board said Tuesday that the percentage of consumers planning to purchase homes, automobiles and major appliances increased this month, even as short-term inflation expectations surged to a 13-year high.
"The consumer's got tons of cash right now so they don't mind the fact that they're raising prices on us – and that's the story right now," Ryan Payne, president of Payne Capital Management told Yahoo Finance Live on Tuesday. "That's why profits are going up. You've got a very price insensitive consumer, because we've got lots of cash. Wages are going up. And companies can keep essentially raising their prices as their costs go up. And that's why we're kind of in this Goldilocks economy right now— another reason why the market's going to continue to climb higher here."
4:09 p.m. ET: S&P 500, Dow pull back from records, Nasdaq jumps as Alphabet, Microsoft set all-time highs after earnings
Here were the main moves in markets as of 4:09 p.m. ET:
S&P 500 (^GSPC): -23.11 (-0.51%) to 4,551.68
Dow (^DJI): -266.19 (-0.74%) to 35,490.69
Nasdaq (^IXIC): +0.12 (+0.00%) to 15,235.84
Crude (CL=F): -$2.58 (-3.05%) to $82.07 a barrel
Gold (GC=F): +$5.90 (+0.33%) to $1,799.30 per ounce
10-year Treasury (^TNX): -9 bps to yield 1.5290%
11:23 a.m. ET: Holiday sales set to rise by more than 10% over last year in the U.S., according to NRF
Domestic sales during the key holiday shopping season could rise in excess of 10% over last year in 2021, according to new forecasts from the National Retail Federation.
The trade association said sales could rise between 8.5% and 10.5%, reaching as much as $859 billion in total between November and December. This would take out the previous record high of $777.3 billion in 2020.
The predictions are consistent with other holiday shopping forecasts from other bodies including Adobe Analytics. In a new forecast last week, the firm said it expected online sales alone would grow 10% to reach $207 billion between Nov. 1 and Dec. 31 this year.
9:31 a.m. ET: Stocks open mostly higher, led by tech
Here's where markets were trading Wednesday morning:
S&P 500 (^GSPC): +1.47 (+0.03%) to 4,576.26
Dow (^DJI): -7.32 (-0.02%) to 35,749.56
Nasdaq (^IXIC): +51.39 (+0.34%) to 15,287.11
Crude (CL=F): -$1.63 (-1.93%) to $83.02 a barrel
Gold (GC=F): +$2.50 (+0.14%) to $1,795.90 per ounce
10-year Treasury (^TNX): -5.5 bps to yield 1.563%
9:13 a.m. ET: Durable goods orders fall by smaller-than-expected margin in September
Durable goods orders pulled back only modestly last month after four consecutive months of advances, reflecting ongoing resilience in the manufacturing sector despite ongoing supply chain challenges and materials shortages.
Orders for U.S. goods meant to last three years or longer dipped by 0.4% in September after a 1.3% increase in August, the Commerce Department said Wednesday. Consensus economists were looking for a 1.1% drop, according to Bloomberg consensus data.
Excluding transportation, durable goods orders up by the 0.4% monthly rate expected, building on gains after August's 0.3% rise. Non-defense capital goods orders, excluding aircraft, rose by 0.8%, exceeding estimates for 0.5%, and reflecting solid business capital spending trends. Non-defense capital shipments, excluding aircraft, rose by 1.4%, or nearly three times the rate expected. This metric is factored into measures of GDP.
9:09 a.m. ET: U.S. goods trade deficit widened to a record in September as exports sank
The U.S. trade deficit for merchandise reached a record level last month, driven by a plunge in exports.
The deficit came in at $96.3 billion in September from $88.2 billion in August, the Commerce Department said in a new report Wednesday. Consensus economists were looking for a trade deficit of $88.3 billion, according to Bloomberg data.
Exports sank by 4.7%, posting their first drop in seven months as industrial supplies and capital goods shipments each sank during the month. Imports, meanwhile, increased by 0.5%, though automobile shipments were down 7.7% to reflect the impacts of the global chip shortage.
7:04 a.m. ET: Stock futures point to a slightly lower open
Here's where markets were trading ahead of the opening bell:
S&P 500 futures (ES=F): -6.75 points (-0.15%), to 4,558.5
Dow futures (YM=F): -31 points (-0.09%), to 35,613.00
Nasdaq futures (NQ=F): -33.5 points (-0.22%) to 15,511.50
Crude (CL=F): -$1.25 (-1.48%) to $83.40 a barrel
Gold (GC=F): -$2.40 (-0.13%) to $1,791.00 per ounce
10-year Treasury (^TNX): -2.2 bps to yield 1.596%
6:04 p.m. ET: Stock futures open little changed
Here's where markets were trading as the overnight session kicked off Tuesday evening:
S&P 500 futures (ES=F): -0.5 points (-0.01%), to 4,564.75
Dow futures (YM=F): -8 points (-0.02%), to 35,636.00
Nasdaq futures (NQ=F): -4.75 points (-0.03%) to 15,540.25
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter